Will Amazon.com Kill Zappos’ Core Values?

Amazon.com just purchased Zappos, an up-and-coming online-centric shoe retailer, for $928 million. That’s right, Amazon.com spent nearly $1 billion on a company that earned only $40 million in 2008. Wow!

The company was built around, and maintains, a very strong customer-centric culture. At the cornerstone of its culture are Zappos 10 core values:

Deliver WOW Through Service

Embrace and Drive Change

Create Fun and A Little Weirdness

Be Adventurous, Creative, and Open-Minded

Pursue Growth and Learning

Build Open and Honest Relationships With Communication

Build a Positive Team and Family Spirit

Do More With Less

Be Passionate and Determined

Be Humble

Hsieh told me that he hires, fires, and promotes people based on their embodiment of these values.

Hsieh has done a great job of embracing one of the 6 new management imperatives that I’ve defined called Invest in culture as a corporate asset. At the end of the day, Zappos’ key asset is its culture.

Amazon.com obviously expects to get more than $40 million in annual earnings for its $1 billion. If it’s looking for much faster growth, significantly more profitability, or a rapid expansion across categories, then how will these goals affect Zappos’ fanatical focus on in it’s 10 core values?

I hope that Zappos’ culture survives.

The bottom line: Will the Zappos culture thrive or die at Amazon.com?

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I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey.
Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum.
My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers.
I am also the co-founder and Emeritus Chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

The free overnight shipping both ways part. I hope they keep that. It’s that Prize that Godin talks of often, the little “extra” that makes customers come back, that nobody else really offers. Being a female and oft an impulsive shopper when it comes to shoes, it’s a big deal actually, that you can get it “tomorrow.” After all, I think that’s why most of us gals prefer to buy in the store. Browse, try them on, and then, instant gratification. Of course, if they don’t fit, the no-hassle return shipping works well. These “extras” actually also allow them to not have to always compete on price; they don’t have to beat everyone’s prices like Overstock or SmartBargains.

Theresa: Thanks for sharing your thoughts. I think Zappos’ model was well-conceived and built around an understanding of how “you gals” like to shop for shoes. Hopefully Amazon/Zappos continues to cater to your specific shopping needs. My regular readers will likely recognize that what I’m merely talking about is the 1st principle of Experience-Based Differentiation: Obsess about customer needs, not product features.

Amazon will not kill Zappos service- Zappos will! They no longer will be fighting to be at the same table as their big competitors. They will slowly stop being what made them great…(hope I’m wrong, but everything crumbles when it’s exposed in a wider environment).

Scott: Great point. Some of the risk to Zappos comes from the outside forces that Amazon brings, but some of it will also come from inside of Zappos. Will they still think/act like the upstart who has something to prove?!? It’ll be tough to maintain that focus now.

As long as Tony and Jen are at the helm, Zappos will remain true to its roots…also, why would Zappos kill off things that not only have made it successful (and able to kill off brick and mortar places), but that differentiates it from other places!